Role of Information Technology in Lean Enterprise Systems

Bhaskar Dubbaka Sayed Payam Dadkhah

This thesis comprises 15 ECTS credits and is a compulsory part in the Master of Science With a Major in Industrial Engineering – Quality & Environmental Management, 60 ECTS credits No 25/2009

Role of Information technology in Lean enterprise systems

Bhaskar Dubbaka, [email protected] Sayed Payam Dadkhah, [email protected]

Master Thesis Subject Category: Technology Series and Number: Industrial Engineering- Quality and Environmental Management

University College of Borås School of Engineering SE 501 90 BORÅS Telephone: +46 033 435 4640

Examiner: Stefan Book Supervisor: Stefan Book [email protected] Date: June, 2009

Keywords: Lean, Information technology, IT, Lean-IT, Enterprise, Quality etc. Acknowledgements

Our master’s thesis work represents the essence of our achievements during one year of study in Industrial Engineering- Quality and Environmental management program at University College of Borås, Borås. During this period there have been many people who have inspired us throughout the study period. The thesis work is concluding part of our university degree in MSc. in Industrial Engineering- Quality and Environmental management. This master’s thesis was written during summer 2009. This period was very exciting And it was very valuable as it has given us very knowledgeable and practical experience for the theoretical subjects we have been studying. We wish to acknowledge the assistance of Stefan Book, our thesis advisor, in the preparation of this thesis work. His professional guidance, insightful suggestions and immense cooperation was of immeasurable benefit in this research. We would also like to express deepest gratitude Lars- Gunnar who helped us a lot in academic writing. Finally, we would like to thank our classmates for their valuable views and suggestions throughout our study period. We thank our families and friends for their love and understanding during our studies in Sweden, wherever we are, you are always with us.

Bhaskar Dubbaka Sayed Payam Dadkhah.

ABSTRACT With the fast a growth of the global economy and the competition in the world, all business enterprises are trying to deliver their products at the lowest possible price and at high quality. At the same time businesses should run in profit. This is possible by reducing waste and introducing new technology like information technology (IT). IT provides necessary information for the customers regarding the new products, quality and recent features about the product design. By using databases in the enterprise, recent market trends and customer needs can be known in advance and the product design can be changed and make the customers more satisfaction. IT also plays an important role in the security of information in the enterprise and also security to the customers regarding product delivery and product details. Lean management systems provide the new ideas about the non value and unnecessary activities in the enterprise. Ultimately Lean reduces the wastage and improves the customer satisfaction. Our thesis focuses on advantages of lean-IT in business enterprise and how information technology can be useful in customer service and continuous improvement by utilizing knowledge management.

Key words: Lean, Information technology, Enterprise, Quality.

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Abbreviations

IT Information Technology

ERP Enterprise Resource Planning

CRM Customer Relationship Management

E-Business Electronic Business

B2B Business to Business

B2C Business to Customer

AI Artificial Intelligence

KM Knowledge Management

CMC Computer Mediated Communication

PDCA Plan, Do, Check, Act

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Table of Contents Role of Information Technology in Lean Enterprise Systems ...... 1 ABSTRACT ...... 4 Table of Contents ...... 6 1 Introduction ...... 8 1.1 Purpose ...... 8 1.2 Limitations ...... 8 1.3 Scope ...... 9 1.4 Methodology ...... 9 1.4.1 Research strategy ...... 9 1.4.2 Positivistic paradigm ...... 9 1.4.3 Deduction ...... 9 1.4.4 Data collection ...... 10 1.4.5 Definitions ...... 10 2 Overview of Lean and IT: ...... 12 2.1 Overview of Lean enterprise ...... 12 2.2 Over view of Information Technology (IT): ...... 13 2.3 Over View of “Six Sigma”: ...... 13 3 Lean Enterprise ...... 16 3.1 Advantages of Lean-IT ...... 16 3.2 Need of lean enterprises ...... 16 3.3 Knowledge Management ...... 17 3.4 Need of knowledge management for an enterprise ...... 17 3.5 Structure for managing knowledge ...... 17 3.6 Knowledge Management life cycle: ...... 18 3.6.1 Knowledge Transfer ...... 19 3.6.2 Role of IT in knowledge transfer ...... 19 3.6.3 Knowledge Use ...... 19 3.7 Role of Lean-IT in knowledge management ...... 19 4 Theoretical frame work for Lean-IT ...... 21 4.1 Lean-IT role in business enterprises ...... 21 4.2 Role of ERP & E-Business in Business Enterprise ...... 21

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4.3 E-Business and ERP in Business Operations ...... 22 4.4 Advantages of ERP and E-business integration in business enterprise ...... 23 4.5 Lean role in customer service ...... 24 4.6 IT role in customer service ...... 25 4.7 How business operations can become efficient by lean-IT ...... 27 4.8 IT support for lean enterprise in business strategy ...... 28 4.9 Continuous improvement by lean techniques and principles...... 28 4.10 IT role in continuous improvement of business enterprise ...... 31 5 Conclusions ...... 32 6 Scope for future work...... 33 Bibliography ...... 34

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1 Introduction

This thesis discuss about integration of two interrelated fields, IT and Lean. Lean principles integrated with information technology improve performance business enterprises. Lean focuses in reducing waste and quality improvement and IT focuses in data and information storage. Lean-IT creates the smooth information and material flow across the enterprise. Based on Information Technology new packages like ERP & MRP have been introduced to the global market to make the business operations more efficient and effective. Lean performance can be improved by IT support; Lean-IT identifies the vital components of information system in the enterprise for smooth information flow. (Bell, 2005)

1.1 Purpose

The main purpose of our thesis is to give the overall idea to entrepreneurs about the lean –IT and its advantages over the traditional lean enterprise. Our report tells about how the business enterprises can become more effective and efficient in customer service to deliver the high quality products with least time and minimum price. And also give an overview of Lean enterprises with Information Technology.

1.2 Limitations

Major limitations of this thesis work are: 1. Integration of two different fields (Lean & IT) has no practical evidence in business organization. 2. Thesis is completely theoretical and no quantitative data was considered. 3. Thesis data collected from different sources of business organization which has no Lean –IT. 4. Thesis is focused on integration of Lean-IT and customer, used only few Quality Control tools. 5. No interviews or meetings conducted with business organization’s people.

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1.3 Scope

This thesis report is a theoretical study about advantages and integration of lean & IT in business enterprises and over view of Knowledge Management and PDCA for Lean-IT.

1.4 Methodology

This chapter gives the overview of methodology to the readers in writing the thesis and gives the idea about methods and procedures carried out in writing the thesis. Gives the how major sources of information collected and in the end methods which are relevant to this thesis work are also explained.

1.4.1 Research strategy

This chapter gives an idea about the strategies followed by us in writing this thesis; we followed theoretical study based theories developed by scientists and data available in different sources like books and internet. In this theoretical approach firstly we collected necessary data and reviewed then try to define the theoretical references.

1.4.2 Positivistic paradigm

Positivistic paradigm gives the theoretical explanation and description and also provides the valid truth information which is “scientific”. Theories give good framework based on descriptions and explanations. Research is based on systematic approach and cause and effect relationship.

1.4.3 Deduction

This method is not based on empirical data, provides information based on logical conclusions. All conclusions of the deductive method are originated from theory behind it; main aim of this method is to find some data which supports the predetermined predictions based on theory.

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1.4.4 Data collection

Data used for this thesis work can be collected from different sources, such as books, databases, archival records etc. Data collection is basically two types, primary and secondary data. (Kumar, 2005)

In this thesis work, we used secondary data, i.e. documents, published articles, websites, databases, archival records and text books.

1.4.5 Definitions

Lean: Lean is a method to identify and eliminate non-value-adding processes in the enterprise. (Levinson W.A. ;Rerick R.A, 2002) Lean manufacturing is a strategy for remaining competitive through continuous pursuit of waste elimination. (Gemba Research, 2009) The Lean Enterprise Institute defines Lean as a set of “principles, practices, and tools [used] to Create precise customer value—goods and services with higher quality and fewer defects with less human effort, less space, less capital, and less time than the traditional system of mass production.” (Gemba Research, 2009)

IT: Information Technology: Technology related to computer hardware and software for the processing, storage, and transfer of information. (Information Technology Association of America, 1997)

SIX SIGMA: Six Sigma is a statistical measurement based on quality systems to meet the customer requirements. (Pande & Holpp, 2002)

Knowledge Management: KM is “A more organic and holistic way of understanding and exploiting the role of knowledge In the processes of managing and doing work, and an authentic guide for individuals and organizations in coping with the increasingly complex and shifting environment of the modern economy” (Denning, 2000) In other word KM is applying principle of management to re-use of knowledge and updates human knowledge with recent technology.

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Enterprise Resource Planning (ERP): According to Nah and Lau (2001) ERP is “a packaged business software system that enables a company to manage the efficient and effective Critical success factors in ERP implementation use of resources (materials, human resources, finance, etc.) by providing a total, integrated solution for the organization’s information- processing needs”. (Al-Fawaz, Al-Salti, & Eldabi, 2008)

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2 Overview of Lean and IT:

This chapter gives an overview about lean and Information technology in business enterprise. How lean and IT are useful for business enterprise to reduce waste and utilize human resource to maximum extend.

2.1 Overview of Lean enterprise

Keyte & Locher (2004), states that common thinking of people about lean is, it’s only applied to the production processes but the interesting thing about the lean is, it can be applied to nonproduction and also administrative processes. But challenging thing would be how it can be applied and implemented in a particular organization.

In the book Lean Thinking (1996), James Womack and Daniel Jones define value streaming to bring the business into action through the three critical tasks. Following are the three critical task of value streaming. Problem solving Information management Physical transformation As per James and Daniel view above mentioned tasks are really critical and brings the expected output if it executed perfectly in any organization. Problem solving Problem solving task is design of product as per the customer needs, market value at a lower price. Once the design is completed the total workflow and information about the production cycle should be passed to all the level people in the enterprise, which reduces the conflicts between employees and employer, at the same time necessary information should be maintained all the time and it should be available to all the people. Information management Information management is a critical and important for any organization to complete the projects without delay and to avoid the communication gap between the employee and employers. Moreover Information management System saves the time in understanding and clarifying the doubts of the project leader at the work area. 12 | P a g e

Physical transformation Last step in the value stream mapping is physical transformation where the raw material is converted into finished goods with the designed process in first step. (Keyte & Locher, 2004)

2.2 Over view of Information Technology (IT):

Castells (1996), states that “IT is combination of microelectronics, computing (hardware and software), telecommunications, broadcasting and optoelectronics”. Main advantage of IT is it increases amount of information which is stored and processed. Moschella (1997) point out that IT has four-phase evolution from year 1964 to 2015.

Following are the four evolutions in IT. i. A system-centric system between 1964 and 1981, ii. A personal computer-centric system between 1981 and 1994, iii. A network –centric system between 1994 and 2005, iv. A projected content-centric system between 2005 and 2015.¨

According to Robert Grouch, in first evaluation period “computer power will become square of the cost”. Moore’s law states that “in second period evolution semiconductors performances will double every two years”. Metcalfe’s states that “cost of network increases in size and semi conductors’ density”. The Law of Transformation explains about fourth evolution and states that “IT industries transformation will be equivalent to the square of the percentage of industry’s value added”. (Moschella, 1997) Hammer & Champy (1993) declare that IT play major role in reengineering process and they call IT as an essential enabler.

2.3 Over View of “Six Sigma”:

According to Pande & Holpp (2002) six sigma is measurement of variance, the “six” in sigma indicates sigma rating, and it meets the customers’ expected time and quality with the rate of 99.966% with 0.034% defect rate in quality measurement. Six sigma tells that 100% quality is not achievable but it can be approach. Six sigma is the highest sigma rating so far to give the highest quality output and to meet the customer requirements for any organization. Major

13 | P a g e advantage of six sigma is; it can be used for all type of organizations to meet their customers’ expectations. Six sigma has following advantages in business organizations. Focuses on customers expected quality instead of input given or output expected. Improves quality by process change with implementation of six sigma. Find the exact causes for poor quality rectifies before dispatching. Makes control over the quality measurement and changes implemented by six sigma gives the positive results in long term. (Pande & Holpp, 2002)

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Table 1-Six Sigma (Sigma) rating Defect rate On-time at-quality rate 0 93.32% 6.68% 1 69.15% 30.85% 2 30.85% 69.15% 3 6.68% 93.32% 4 0. 62% 99.38% 5 0.23% 99.77% 6 0.034% 99.966% Sourse: (Pande & Holpp, 2002)

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3 Lean Enterprise

3.1 Advantages of Lean-IT

Reduces the production time by adopting the modern working methods. The production process will become faster with less effort and with high quality. Reduction waste in terms of human effort, time and material. Improved customer satisfaction by effective and efficient use of available resources. Identification and elimination of waste by value- adding activities. Combines complex business processes and makes them simple. Performs the operations between applications and systems Provides dynamic response to uncertain activities. Produces standardized documentation work across the enterprise. Provides security for enterprise data by using cryptography technology which is used to send data or messages securely. (Avande, 2005), (White, Jack; Chaiken, Scott;, 2008)

3.2 Need of lean enterprises Lean provides the necessary insight and infrastructure (instrumentation) into the business service and process. Maximize the value and minimize the waste by removing the unnecessary activities in the process and management. It gives an idea about the production quantity by that overproduction can be minimized. Lean reduces the product handling activities which reduces processing time and eliminates defects. Lean reduces the waste in transportation by fixing the accurate details about the distance and time for finished goods. It provides necessary information for the production department to reduce the machine downtime, by fixing solution for future arising problem in advance also machine downtime will come down. Lean identifies the problems on work in progress and gives the necessary information to correct it before producing poor quality product. Necessary alerts can be sent to technicians regarding the problem and by that back up is possible. More over lean lead to the less defect items and quality improvement. Lean reduces the excess or low inventory cost by identifying the exact material needed for continuous production and provides right inputs in right time. (Hurwitz, David; Demacopoulos,

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Katherine;, 2009), (Recalibrating lean: Enterprise mobility and continuous improvement in manufacturing, 2007)

3.3 Knowledge Management

Hicks, Galup, & Dattero (2006) believe that identifying, capturing, retrieving, sharing, and evaluating an enterprise's information assets through an integrated approach which KM sponsor it the assets can be include data bases, policies and procedures or any other information which have not recorded and workers have them in their head.

3.4 Need of knowledge management for an enterprise

Long etal (2005) mention in their presentaton that knowledge management cut the cost and with better knowledge about the workplace lead to safety and less risk work environment. Knowledge management always follows smart work instead of hard work, smart work deals with logical thinking and less physical and mental effort which reduces the product life cycle time ultimately save in time and cost. Decision making would become easy in critical situation; knowledge management provides necessary information and data regarding the all departments and previously raised problems (Long, Marling, Bailey, DeLoach, & Secor, 2005) Knowledge management plays the vital role in managerial level people in strategic planning. It requires the exact data in designing and implementing strategies to achieve organizational goals. More over KM reduces the employee training by providing the necessary information to the new employees and with expert’s supervision who are specialists in their work area. Knowledge Management makes the business organization efficient and effectiveness in the policy making, strategic planning, and coordination between employees, and information sharing by providing the advanced technology and updated information.

3.5 Structure for managing knowledge

Wenger states that Communities of Practice (CoP) is a structure for managing knowledge. CoP is group of people who share their ideas and improve knowledge by interacting each other. CoP improves interaction, builds relationships and develops mutual commitment.

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3.6 Knowledge Management life cycle:

Dr. Raymund Sison (2006), states that Knowledge Management is the management of knowledge life cycle it contains mainly three processes. Following are the 3 processes of KM life cycle.

o Knowledge Creation o Knowledge Transfer o Knowledge Use

Figure 1- Knowledge Life Cycle

Knowledge creation can be done in two ways: o Tacit o Explicit Tacit methods of creation tell about creation of knowledge which cannot able to express openly but understands clearly, such as socialization learning and internalization. In both socialization and internalization is very useful in initial stages of knowledge creation, at this stage one’s knowledge is very less and understood clearly all basic things, good example is children listening to the lessons in the school. Explicit method tell about expression of knowledge which is gained through external sources like from libraries, databases etc, basically it requires the tacit knowledge and here one express their ideas openly. (Sison, 2006)

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3.6.1 Knowledge Transfer

Knowledge transfer can be done in two ways: o Direct knowledge transfer o Indirect knowledge transfer. Best way of direct transfer method is person to person communication; knowledge can be transfer through meetings, seminars, conferences and through group discussions. In indirect knowledge transfer knowledge can be gained through the previous records, files, documents and through databases which is in codified. (Sison, 2006)

3.6.2 Role of IT in knowledge transfer

(Sison, 2006) states, IT makes the inter link between people and enterprise with indirect knowledge transfer through internet and databases. IT makes the easy knowledge transfer to all level of people in enterprise with easy access to the enterprise web sites and database to review previous case studies and project. By providing the E-mail facilities and intranet within the enterprise makes the professional connection between the people and improve the knowledge and information sharing about the present and future projects, ultimately it leads to the improve in knowledge management within the enterprise.

3.6.3 Knowledge Use

Knowledge management can be used through KM tools like 1. Computer-Mediated Communication (CMC) tools 2. Database management systems 3. Asynchronous-e-mails & discussion forums 4. Synchronous- chat & conferencing tools (Sison, 2006)

3.7 Role of Lean-IT in knowledge management

Knowledge management can be used effectively by IT and technology like Artificial Intelligence (AI). AI is a computer technology which is used to solve logical problems without human

19 | P a g e interaction. AI uses few computer techniques such as expert system, neural networks and generic algorithms. Due to AI new knowledge and learning is possible without providing any training for employees, some problems can be solved by using AI, which finds the solution by its own. AI is also the source of knowledge and can be used to manage issues fast and without any human support. (Pollock, September 2002)

IT in knowledge management improves the management process by Capability Mature Model (CMM), it explains how enterprise improvement can be done by five maturity levels such as Initial, Repeatable, Defined, Managed, Optimizing:

In initial stage competent people will be appointed to all the areas to improve the enterprise performance.

Repeatability is second maturity level in KM process to improve project administration process and focuses on requirements of the management, software project planning by that software assurance can be done and easy to maintain software configuration management.

In defined level software acquisition and management and management support can be focused to define and achieve organizational process and to provide inter group coordination.

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4 Theoretical frame work for Lean-IT

This chapters describes theories related to the present thesis work are. The theoretical framework for Lean-IT and discussing all the important topics related to Lean-IT.

The purpose of this chapter is to set up a basis for theoretical frame of Lean-IT concepts and describe technological advantages and the theoretical benefits. This chapter provides the overview about Lean-IT concepts and related systems with its advantages in business enterprises.

4.1 Lean-IT role in business enterprises

Lean thinking in the business improves productivity and competence by that business stability and profitability can be achieved as per the recent trends in the business management and technology lean cannot achieve the organizational goals alone, it need some support such as strategic planning, leadership and technology. Successful lean implementation can be done by using the Information technology in enterprise, by integrating the lean & IT misalignment can be eliminated which results in exact product output with least waste, the exact technology needed to avoid the confusion between the lean & IT is either MRP or ERP. By integrating lean & IT, an enterprise maintains their financial data, client orders and purchasing. Lean- IT is most useful in monitoring and improvement of enterprise performance. Changes in the business environment can be easily adopted by lean-IT with improved performance. In recent conferences world class companies like Johnson Controls, Schefenacker, Magal Engineering and James Walker are confirmed that lean-IT has positive impact on their business. Major advantages of lean-IT they observed are transparency across the supply chain; flexibility reduced lead-time and increased production. (Found, 2006)

4.2 Role of ERP & E-Business in Business Enterprise

With the introduction of E-business in business enterprises ERP has become the main networking system. As lot of companies are looking to use e-business to increases the usage of ERP to support business-to-consumer (B2C) and business-to-business (B2B) solutions instead of web support. Entrepreneurs are going to see a new enterprise system by combining the ERP and e-

21 | P a g e business which makes the business faster with increased competitive ability in global market and strengthens the B2B and B2C relations. With this new business integration enterprise system, information and process flow in the enterprise will become more realistic and visible.

E-business stands for “electronic business”, name itself indicates its operation that business operations can be done electronically through internet. E-business is defined as “the use of electronically enabled communication networks that allow business enterprises to transmit and receive information” (Fellenstein & Wood, 2000). Due to advancement in technology customers and suppliers want to do their operations with less effort, faster processing and safe payment methods, e-business allows the people to purchase and sell their products through internet and from any corner of the world one do the business operations safely and quickly with e- business. It is very efficient in selling, marketing the company products and purchasing the goods from suppliers and also e-business improves the customer service with safe payment and dispatching methods of products and with fewer prices. E-business focuses on customer benefits and improves the business. Enterprises use internet to increase customer-relation-management (CRM), which maintains relations between suppliers and customers. About 50% of labor force can saved with the integration of ERP and e-business to solve the customer service problems (Oracle 2000).

ERP and e-business systems are very useful for enterprise, where ERP maintains the internal value chain in the enterprise and e-business maintains the relations between the market and industries, now a day’s almost all companies are looking towards ERP and e-business integrating enterprise systems which make the enterprises more effective and efficient to face the global completion. (Wang, Betty; Nah, Fiona Fui- Hoon, 2002)

4.3 E-Business and ERP in Business Operations

In normal business operations after receiving the order from customer, information has flow across the different departments till product delivered and payment received. Operations can be controlled by respective departments and information cannot be shared with another department. With the traditional business systems there is no sharing of business operations and process.

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From last few years due to advancement in IT, companies are integrating their core business process into single system. ERP system provides the necessary support to integrate the all businesses operations into single platform more interesting thing with this system is; it includes the all stake holders of a company and also system operations and development. (Wang, Betty; Nah, Fiona Fui- Hoon, 2002, pp. 4-5)

4.4 Advantages of ERP and E-business integration in business enterprise

SAP and Oracle are the world leading ERP providers for different business enterprises. Following are the major advantages with integration of ERP and e- business. Improves the customers’ relation with the company by maintaining the uninterrupted information system. Provides clear B2B and B2C solutions with enabled web database technology ERP & e-business provides easy employee access to software and data sharing between different departments which saves the time and improves the coordination within the enterprise. Enterprise will become global access and obviously operations would be globalizes. Maintains the link between business applications and process to achieve the expected quality and customer satisfaction

XML (Extended Mark-up Language) in the e-business provides the access structured business documents to communicate and exchange business information and data and it also acts as bridge between companies and user. More customer service and satisfaction giving up the easy access to the customers with companies information systems. Improves the suppliers and companies relationship by providing the link between suppliers’ web site and company regarding the catalogues and requirements and updates the information automatically and gives the real time information whenever necessary. Due to decentralization of enterprise operations decision making would become easy for top level management. (Wang, Betty; Nah, Fiona Fui- Hoon, 2002, pp. 11-14)

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Table 2 Companies that are using different ERP soft ware’s in the world Company Soft Ware ABAS-USA abas ERP Infor Global Solutions VISUAL Enterprise Account Mate Software Corporation Account Mate for SQL Oracle Corporation Oracle Financials (E-Business Suite) Microsoft Business Solutions Dynamics SL SAP my SAP ERP Source: www.tgiltd.com (ERP Comparison List, 2009)

Customer Relationship Management (CRM): Main aim of CRM is to identify the customer requirements by collecting the data directly from them and use this data for new product design, easy marketing, and high customer service. Internetworking: Business enterprises connect their employees and work by network connections like LAN (Local Area Network) & WAN (Wide Area Network). Main aim of internetworking is to view the current data available in the in the systems at any time from any place in the work area. e-commerce : After manufacturing the product, selling the products is major activity one of the fast and efficient way to sell the product through internet, this is also known as internet shopping, through this customer can order their products through internet, this is most useful to customers and suppliers for order their quotations (Low, 2000)

4.5 Lean role in customer service

Whatever the aspects or principles we follow it should be accept by customer in the end. Without customer satisfaction no mean producing the high quality goods with extraordinary features. Honestly saying customer is the final inspector and decision maker for any company. To keep this in mind customer all activities in organization should improve customer satisfaction and provide descent customer service otherwise it should be eliminated.

Lean play the very important role in customer service, major lean principle consider in customer point view is customer’s time, companies shouldn’t think that customer’s time as “for free”, by keeping time in mind one should not waste the customer’s valuable time, at the same time

24 | P a g e companies should provide the appropriate solutions to the customer’s problems what exactly they want and if possible bit extra.

Lean work methods maintains long and loyal relationship with customer by delivering high customer service in all the time irrespective of the market fluctuations and changes in product design scenario this loyal relationship with customer make good bond between customer and company.

Ultimately lean working methods plays vital role in customer service in terms of time consumption, solutions for customer’s problems and their loyalty.

4.6 IT role in customer service

Customer time is very important factor for service providers, to avoid the time delays and save customer as well as company’s time to interact with customer; IT is the best way to reach the customer and to deliver the solution in time without time delay.

IT provides the access to the global customers, by using IT one can send their orders from any place and ask the solution for the problem which rose after purchasing the products. Companies can also able to access to the customer needs time to time, all the information received by the customers can be stored in database and it can be split as orders, solutions for customer problem, dispatching data. By using software companies are displaying online customer service form, which is simple form contains columns regarding product and service quality and customer satisfaction. By using this online form companies receives feedback from customers all over the globe.

Companies responds immediate as per their order and requirements and sends immediately reply regarding their dispatch of products with all necessary details such as delivery date, quantity of products, delivery procedure etc.

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With easy and flexible access with company customer may feel comfort and secure regarding their service finally customer would become satisfy services provided by companies. (Das, Amit; Wai Lin Soh, Christina; Chang Boon Lee, Patrick, 1999)

System

Administration Networks

IT

Hardware

Software er

Database

Order Purchase Complaints

Internet Customer

Customer Service

Figure 2-IT role in customer service

Figure 2 illustrates role if IT in customer service, customers can get service by accessing to internet and calling to customer service centre, IT provides database to enterprise to see the customer orders, payment and complaints. For example if customers wants to orders, purchase

26 | P a g e for products or complaint about the product, then he can use the internet option directly where companies provides the three kind of forms in company web page like Order, purchase and complaints, where customers can choose whatever they want, all the information is stored in database and answer can be given through e-mail and products can be directly send to their address which is was mention in website while order or purchase. And other way to get the company access is by calling the customer service centre of company where complaints and orders are handled and the information sent to company database from their information is in send to exact department to do the customer service. Fig.4 illustrates that information flow and data storage is very important in customer service, IT provides the smooth information flow without any delay and stores accurate data for long time. By above figure we can conclude that IT plays important role in customer service.

4.7 How business operations can become efficient by lean-IT

Every business organization wants to gain more profits by competition with other companies in the global market to achieve this goal companies follows different strategies themselves. Strategies should ultimately bring customer satisfaction, reduce the waste in the enterprise and deliver the high quality product. Enterprises will become more efficient and profit by eliminating waste and non-value added activities in the process and management as well. Waste can be reduce by implementing the lean principles and techniques in the enterprise, reducing waste nothing but utilizing the available human resource to maximum extend and by introducing the technology into the business operations, such as Information technology and communication systems. By concentrating on continuous improvement techniques and by building up the technology in the enterprise may create new customers and increases customer value.

An ERP system is the best technology tool to improve the business operations, when enterprise software combines with lean techniques may result in transparent monitoring on inventory and makes immediate response to client order changes, technology and lean integration enables business intelligence and untreatable management. (SAP, 2007)

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4.8 IT support for lean enterprise in business strategy

By introducing the lean-IT combination enterprise operations would become more efficient, that results in easy to understand customer needs and task to reach the customer expectation would become easy. Lean-IT provides common business process which can be evaluated time to time and optimize. Knowledge and data sharing in enterprise provides real time management and also activates the important factors which plays very important role in lean such as business intelligence and analytics. (SAP, 2007, p. 6)

4.9 Continuous improvement by lean techniques and principles

As Steve Bell, (2005) states that “lean and IT in the organization would increase in productivity and reduces waste in the organization very useful in the continuous improvement and free flow if knowledge in the enterprise. At the same time if the “IS” is not realistic and burdens to operate and causes overproduction and waste” As Bell stated in above statement that if lean-IT is not properly utilized instead of increase in productivity and quality it may be Burdon to the organization more over leads to increase in operating cost and waste, finally Bell states that introducing the new technologies and principles never brings continuous improvement, introduced technologies and principles should be implemented and executed properly then only we can expects positive results in the area of production, quality and continuous improvement.

Lean IT is power tool to achieve the continuous improvement in any organization by breaking the complexities in the process and management. Lean IT reduces the waste and unnecessary activities in the organization and also makes the people to familiar with activities and process.

Continuous improvement can be done by designing a PDCA cycle in the enterprise, PDCA cycle (basically known as Deming/Shewart cycle), which explains about Plan-Do-Check-Act (PDCA). PDCA is the one of the tool used for continuous improvement in the organization. PDCA is the best toll for team leaders who are working in dynamic team environment, it helps in defining the goals and give the pathway how reach it. (Bell, 2005, pp. 23-24)

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Figure 3- PDCA cycle1

PLAN: Plan makes the work method and process simpler, in planning team identifies the problems and start investigating to find the root causes and best solution to solve the problems. Plan describes the process verbally and clearly for easy monitoring in this description process mapping and value stream mapping is very useful. PDCA address limited number of variables at once which eliminates the confusion and give the exact cause for problem and maintains good relationship within the team. Once the current state has defined then identifies measurements for future state. Measurement should be consider end results and process measure which are important in both lead time measurement and time required for input. After testing if result is not up to satisfactory level, process measurement gives the idea about where and when it went wrong. Plan provides clear idea of process and persons involved in it and tell the team leaders about the necessary training for people at this level. (Bell, 2005, p. 24) DO: This phase can be known as testing phase; here all suggestion from different sources can be tested in realistic environment with prototype model. Here IT plays very important role in the design and testing the models, instead of testing the models in physical environment, testing can be done by using the software which reduces the cost and time. And more over software can be used in future and allows us to make changes as the proto type model changes this would be the greater advantage of the IT in enterprises. (Bell, 2005, pp. 24-25)

1 http://www.documentation.com.au/hcisite2/toolkit/pdcacycl.htm 29 | P a g e

CHECK: In this phase result obtained from DO phase can be compared with assumed or expected final results. Differences between the result can be analyzed and finds actual factors effecting final result or investigates the weather the hypothesis is valid or not. This phase open new gate way to second cycle if the if the hypothesis is invalid else prototype model is success. Among the group of limited hypothesis considered for plan and do are prove correct then another variable can be considered for next PDCA cycle. . (Bell, 2005, p. 25)

ACT: This is the final phase of the PDCA cycle where implementation takes place, by considering all test results from plan, do, check phases a new future state would be implemented in the enterprise. Few changes may takes place in the enterprise in terms of employee training, moving the equipment into different places, installation of new technologies like communication, IT and automation. . (Bell, 2005) Finally PDCA is a continuous cycle which resembles as corkscrew. According to our view PDCA is the one of the best tool to implement the continuous improvement in any organization. PDCA provides the guidelines to employees in the floor as well as to the management. It also acts as bridge between the employees and management. With PDCA implementation all the team leaders would become clear and fair with their targets and lead their team in front, team leaders would become familiar with their team skills, strengths and weakness, according to their strengths and skills assigns the works to correction persons which may bring positive results on production schedules, quality output, reduction in waste. To overcome the weakness some persons would be recommended to take training and to update the employee’s knowledge to face the global competition advanced training in the newly introduced technology may results in enterprise growth and employees satisfaction. With PDCA cycle all the areas in the enterprise would become active and new scientific working method can be implemented and employees and employers follows the recent trends in technology and trying to update their knowledge time to time by this continuous improvement can be done and implemented.

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4.10 IT role in continuous improvement of business enterprise

As we discussed in previous chapters role IT is very important in continuous improvement. IT is going to play vital role in management and in production for continuous improvement in their areas. As Anders Ingwald & Mirka Kans (2007) stated in their paper “The use of IT within maintenance management for continuous improvement” Computer Maintenance management System (CMMS) is very important for an organization and also supports the activities involved in continuous improvement, and given a conclusion that CMMS has not used to greater extend in data collection that’s what IT tools not supporting for industry.

(Ingwald & Kans, 2007)’s above statement justifies that CMMS was not properly used to greater extend, as we discussed earlier introducing of new technology in enterprises alone never give the positive results it should be utilized to maximum extend and implanted properly in right time and in right areas. CMMS is an advanced tool for management to monitor the current situation in enterprise, with this technology computers are integrated with equipments for maintenance and monitoring from single place. With this arrangement current situation can be monitored in online and machines are in the control of computers. By introducing the CMMS in the enterprise leads to reduction in waste and maximum utilization of equipment and close monitoring of employees activities, break down time and start and stop timings of the machines may come down. CMMS is also provides the users to (Ingwald & Kans, 2007, p. 55)

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5 Conclusions

1. Lean increases the output by reducing the waste and unnecessary activities. 2. Lean follows the smart working methods instead of hard working. 3. Human resource can be utilized to maximum extend by Lean-IT. 4. IT make the business operations more dynamic 5. IT is very useful in data storage and processing and makes business monitoring systems easy. 6. IT provides faithful security for enterprise by using the software like cryptography. 7. Lean provides better idea about the production system by that overproduction can be reduced. 8. With introduction of KM in lean-IT makes less training, provides good knowledge about work culture and less risk at work place. 9. KM is very useful for managerial level people in decision making and strategic planning by proving the exact past and present information about the enterprise. 10. KM in lean-IT provides facility of knowledge sharing by that all lever people would become familiar with recent trends in business. 11. Lean –IT is very useful for B2C and B2B with ERP and E- business. 12. Lean-IT provides easy customer service and improves customer satisfaction by providing with easy access with business enterprises. 13. Lean-IT achieves the expected customer quality by providing good relations with customers and recent trends in global market. 14. Lean-IT provides access to the customers from all over the world. 15. Continuous improvement is possible by lean-IT with the combination of KM; it leads to easy flow of knowledge in the enterprise.

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6 Scope for future work

As IT systems provided new supportive techniques to lean enterprise, hence study about the role of Lean -IT in business enterprise would be remarkable. Lean-IT can contribute in new methods of knowledge management in enterprises to reduce training and better working methods a new knowledge management system may possible in future with Lean-IT. Possibility of all different departments in enterprise may come under one roof and central monitoring and easy information flow system would be possible with minimum cost. New technologies like Lean, Six Sigma; IT may combine and form a new technology to focus on customer service, reducing waste, high quality products with minimum defects.

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